Ensco Rowan mixed as name change announced; L Brands higher in retail space

By James McCandless

San Antonio, July 3 – On a trading day cut short by the coming Fourth of July holiday, the distressed debt space paid more attention to telecom and energy names Wednesday.

Ensco Rowan plc’s notes were mixed after the company announced that it would be changing its name at the end of the month.

Oil futures saw a boost, followed by Chesapeake Energy Corp.’s, Superior Energy Services, Inc.’s and Montage Resources Corp.’s paper.

Meanwhile, retailer L Brands, Inc.’s notes were seen gaining after an analyst recommended the company spin off one of its segments.

Cosmetics name Revlon, Inc.’s issues fell.

In telecom, Frontier Communications Corp.’s paper was lower in the telecom space in the wake of a shareholder rights plan.

Sector peer Intelsat SA’s notes saw a better day.

Dairy name Dean Foods Co.’s issues slumped.

Ensco Rowan mixed

In energy, Ensco Rowan’s notes saw mixed results, traders said.

The 5.2% senior unsecured notes due 2025 added ½ point to close at 73¾ bid. The 7¾% notes due 2026 dropped 1¾ points to close at 75 bid.

After the Wednesday close, the London-based contract driller announced that it would be changing its name to Valaris plc.

The change will be effective July 31.

Months after Ensco and Rowan announced the merger, it was finalized in April of this year.

The company’s structure saw some positive attention amid climbing oil prices and a recognition of an increase in offshore drilling projects.

Oil names higher

As oil futures recovered, popular energy tranches followed, market sources said.

Oklahoma City, Okla.-based independent oil and gas producer Chesapeake’s issues rose.

The 8% senior unsecured notes due 2025 rose ½ point to close at 91 bid.

Houston-based oilfield services name Superior Energy’s paper saw the same trend.

The 7 1/8% senior unsecured paper due 2021 gained 2¾ points to close at 72½ bid. The 7¾% paper due 2024 moved up ¼ point to close at 65¼ bid.

Irving, Texas-based producer Montage Resources’ notes improved.

The 8 7/8% senior unsecured notes due 2023 tacked on 2¼ points to close at 77¼ bid.

West Texas Intermediate crude oil futures for August delivery improved by $1.09 to end the short session at $57.34 per barrel.

North Sea Brent crude oil futures for Sept. delivery ended the day at $63.82 per barrel after a $1.42 rise.

L Brands gains, Revlon falls

Meanwhile, in the retail space, L Brands’ issues gained on Wednesday, traders said.

The 6¾% senior unsecured notes due 2036 moved up ½ point to close at 89¼ bid. The 5¼% notes due 2028 also picked up ½ point to close at 94 bid.

On Wednesday, an analyst wrote in favor of a recommendation that a hedge fund made to the Columbus, Ohio-based retailer in February.

The analyst said that the likelihood of an increase in equity value for both parties would increase if the company’s Bed Bath & Beyond segment were split off into a standalone business.

The estimated share value of the name without the segment would be worth more than the enterprise today, the analyst wrote.

“It’s working for PetSmart,” a trader said. “That model is being considered by retailers in the same position right now.”

New York City-based cosmetics producer Revlon’s paper was falling.

The 5¾% senior unsecured paper due 2021 slipped ¼ point to close at 90 bid. The 6¼% paper due 2024 lost 3¼ points to close at 69 bid.

Frontier lower, Intelsat up

Elsewhere, in telecom, Frontier’s notes went lower, market sources said.

The 10½% senior unsecured notes due 2022 dropped ¾ point to close at 66½ bid. The 11% notes due 2025 shifted down ½ point to close at 61¾ bid.

Late Tuesday, the Norwalk, Conn.-based wireline communications name adopted a shareholder rights plan with the expressed purpose of ensuring the availability of its net operating loss carry-forwards.

The plan also offers current shareholders of common stock the opportunity to purchase more at a 50% discount if any group acquires 4.9% or more of the stock.

The company is currently exploring options to tackle its 2022 maturity wall.

Luxembourg-based satellite operator Intelsat’s issues trended upward.

Intelsat Jackson Holdings SA’s 5½% senior unsecured notes due 2023 gained ½ point to close at 91½ bid.

Dean Foods down

In the food space, Dean Foods’ paper saw a slump, traders said.

The 6½% senior paper due 2023 lost 3 points to close at 52 bid.

On Monday, the Dallas-based dairy product manufacturer announced that it had successfully increased its borrowing base ability to $265 million under its senior secured revolving credit facility.

The company is currently considering strategic alternatives as it faces decreasing sales and increasing competition.

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